municipal energy efficiency program in tamil nadu, india
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A Replicable Approach to Project Financing Through ESCOsTRANSCRIPT
Municipal Energy Efficiency Program Tamil Nadu, India:A Replicable Approach to Project Financing Through ESCOs (Energy Service Companies)
Kateri Callahan, PresidentAlliance to Save Energy
1850 M Street, NWWashington, D.C. 20036
A
What is the Alliance to Save Energy? Mission: To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.Organization: Staffed by 90+ professionals34 years of experience$16 million annual budgetPremier energy efficiency organization in the worldOffices in South Africa, India, Mexico and Eastern Europe
What is the Face of the Alliance?
Business ▪ Government ▪ Public Interest Coalition membership of more than 175 diverse organizations Involvement by businesses in all economic sectors Participants active in policy research, standards, education & communication
Efficiency of Water Systems
WATERGY WATERGY makes the best use of two valuable, limited makes the best use of two valuable, limited resources: water & energyresources: water & energy
WHY IS THIS IMPORTANT?WHY IS THIS IMPORTANT?
Every liter of water that passes through a system has a significant Every liter of water that passes through a system has a significant energy costenergy cost..
Water sector efficiency leaves more funds for crucial and often Water sector efficiency leaves more funds for crucial and often underfundedunderfunded public servicespublic services..
In most developing countries, In most developing countries, 1/3 to1/3 to 1/2 of water produced is 1/2 of water produced is lost.lost.
AND IT’S COST EFFECTIVEAND IT’S COST EFFECTIVE……
Rapid Rapid PaybackPayback:: generally from a few months to 3 yearsgenerally from a few months to 3 years
Huge Huge SavingsSavings: : at least 20% in energy costs; much higher possibleat least 20% in energy costs; much higher possible
Makes the most of existing Makes the most of existing infrastructureinfrastructure; reduces the need for ; reduces the need for newnew
Cost-Effective Interventions
Pumps
Leak Management
Automated Controls
Metering & Monitoring
Energy Efficiency in Indian Municipalities – Context
Indian municipalities spend an estimated 40-60% of their annual budget on energy costs
Numerous barriers to saving energy: - Lack of technical, managerial, financial capacity for
improving energy efficiency
- Lack of adequate metering (e.g., in buildings, water supply, street lighting systems)
- High rates of unaccounted for water; unreliable water services
- Lack of Government policy on reducing energy consumption
- Low confidence in public-private partnerships
Tamil Nadu Project - An Overview
Purpose: Improve energy efficiency of water supply and street lighting
systems in Tamil Nadu Create replicable financing model and toolkit to ensure that
municipal EE projects are successfully implemented using performance contracting/ESCOs
Partners: Alliance to Save Energy, REEEP Tamil Nadu Urban Infrastructure Financial Services Limited
(TNUIFSL) Tamil Nadu Urban Development Fund (TNUDF) Municipal Administrations, Urban Local Bodies
Project Overview
Unique Team: TNUDF + The Alliance + Municipal Administrations o Program management expertso Infrastructure development expertso Energy Efficiency technical experts
Phased Approach:o Phase I – 29 citieso Phase II – 16 cities
First statewide bundled municipal EE initiative for water pumping and street lighting in India
Project Highlights
*Two ESCOs selected to carry out the Phase I project*
Step 1 -- Investment Grade Audits Baseline parameters Energy saving projects/proposals Comprehensive reengineering design Project cost & economics Project duration Risk assessment and mitigation
Step 2 -- Implementation of Improvements, Monitoring & Verification of Results
Project financing Complete installation and commissioning Savings measurement and verification – “ IPMVP” Equipment maintenance
Project- Financing Model
Project Output Developed financial tool kit for municipal EE
project- Model EOI, RFP, EPC document along with evaluation
criterion
- M&V Plan and reporting formats
- Investment grade energy audit guidelines
- Project repayment mechanism
Watergy M&V protocol developed and tested for its suitability in Indian context
Strategy document to scale up program in other municipalities in Tamil Nadu, based on the lessons learned
Policy Outcome
The Government of Tamil Nadu issued a Government Order (GO), a first-of-its-kind GO in India, empowering municipalities to proceed with project implementation through performance based contracts through ESCO mechanism.
http://www.reeep.org/57.17564/tamil-nadu-ee-drive-strengthened-by-government-order.htm
Project Impact Tamil Nadu project concept and methodology replicated in
USAID-supported Gujarat state-wide municipal EE program (159 cities)
BEE’s municipal demand side management program is based on Tamil Nadu project methodology
Other urban local bodies in India are using Tamil Nadu project concept and documentation to develop municipal EE projects
TN Government Order is helping other states initiate similar programs
Banks and FIs have started to show interest in lending for large municipal EE projects
New opportunities for private service providers & energy professionals to partner with ESCOs in municipal EE projects
